Enbridge Inc., one of North America's largest transporters of fossil fuels, is preparing for changes in energy markets with a pivot to renewable energy and a target of reaching net-zero emissions by 2050.

Renewable power is now "the fourth Enbridge platform," President and CEO Al Monaco said on a third-quarter earnings conference call. The executive was referring to the company's investments in green power facilities in North America and Europe.

The Calgary, Alberta-based midstream operator is also looking at growing interest in alternative fuels, including hydrogen, and will start adding the element to natural gas early in 2021 for some customers at its Ontario utility. Enbridge is also looking at leveraging its pipeline-building expertise to adapt and build conduits capable of hauling the new fuels.

The company planned to reach its target of net-zero emissions by adapting to changes in the energy mix — including the phaseout of coal by some of its electricity providers — and incremental changes such as modernizing and replacing existing pipeline equipment with infrastructure that produces fewer emissions. Enbridge planned to capitalize on opportunities such as renewable natural gas, or RNG, and hydrogen production but did not anticipate a "capital-intense effort" to meet the net-zero milestones.

"We're ahead of the curve on some of the good, long-term opportunities where technology has already been proven out, so we're not too far out on the technology scale," Monaco said on the Nov. 6 call. "I think we're doing it in a way that aligns with the pace of transition that we see."

READ MORE: Sign up for our weekly ESG newsletter here, read our latest coverage of environmental, social and governance issues here and listen to our ESG podcast on SoundCloud, Spotify and Apple podcasts.

Monaco stressed that oil and natural gas will continue to be mainstays in the energy industry for years to come and will remain a major part of Enbridge's business as global demand continues to rise through population growth, economic development and urbanization. The company's core business of shipping oil from Canada to the U.S. remains strong as demand for oil-sands derived heavy crude has increased because global supplies have decreased. After a second-quarter slump in shipments of tar-like bitumen blend on its mainline system, volumes have rebounded with resurgent demand from heavy oil refiners. Enbridge reintroduced prorating of heavy oil shipments on its mainline and has been "full-up on heavy capacity since July," Monaco said.

"Heavy is going to be in shorter supply as Mexico and the rest of the world decline," Monaco said. "The only sources of heavy growth are the Middle East and Canada. That's why Canadian barrels with big growth potential and proximity to U.S. markets are ideally positioned."

Still, Enbridge will continue to pursue opportunities in the RNG and hydrogen businesses as part of its long-term strategy. The company has RNG plants running and in development. It has piloted North America's first power-to-gas facility, which uses an electrolyzer to convert water to hydrogen.

"We have six RNG projects operating and in construction; these are in the upgrading and injection end of the RNG value chain and more are planned," Monaco said. The plants "are either included in [utility] rate base or have long-term contracts so they fit the overall business."

RNG is unlikely to come into play in a material way before 2040, Monaco said. Hydrogen, while promising, faces economic hurdles before its use could become widespread.

"There has been a lot of talk about hydrogen and its obvious merits," he said. "The economics in our view for blue and green are challenged right now, but support will increase and costs are bound to come down."

Blue hydrogen is produced from natural gas using a steam methane reforming process that captures carbon dioxide emissions. Green hydrogen is hydrogen produced through electrolysis using renewable power.

The company has considered additional investments in wind and solar power to help meet its net-zero targets. Enbridge has an inventory of projects for the next five years, and while it would consider buying into promising assets, it will not compromise its investment criteria, Monaco said.

"If we can't find good opportunities, we are not going to stretch our return threshold," the CEO said. "We recently turned away a couple of opportunities that didn't make sense for us."

Separately Nov. 6, Enbridge reported third-quarter adjusted EBITDA of C$3.0 billion, down from C$3.1 billion a year earlier. The S&P Capital IQ consensus estimate of adjusted EBITDA for the third quarter was C$3.11 billion. The company's distributable cash flow in the third quarter was C$2.09 billion, a drop from C$2.11 billion a year earlier. Enbridge reported third-quarter net earnings attributable to common shareholders of C$990 million, up from C$949 million a year earlier.